Job growth in the US has slowed. The unemployment rate has risen to a high not seen in recent years, and wage growth has slowed. It is extremely important manufacturing sector has cut jobs seven months in a row, despite tariffs that were supposed to support American manufacturing jobs.
“What we’re doing isn’t working,” said Justin Wolfers, an economics professor at the University of Michigan and a senior fellow at the Brookings Institution.
Wolfers says that since Trump imposed the tariffs on April 1, manufacturing sector lost 67,000 jobs. And he says the reason is clear.
“The President has introduced a series of measures that have caused significant harm to the United States. And the United States economy has performed terribly. So that part seems pretty easy to me,” Wolfers said.
Canadian steel and aluminum are subject to a 50 percent tariff. Thus, any American company using this steel to make products had to either find a new source, pay a tariff, or make do with imports accumulated before the tariffs were imposed.
Automakers have complained that the tariff regime will cost them billions of dollars.
Economic debateThe impact of Trump's tariffs has been growing since last November's election.
Critics say the tariffs are a tax on imports paid by American companies that will ultimately slow economic growth.
The Trump administration has repeatedly rejectedhat argument. The tariffs are sometimes said to be paid by foreign countries (although it is acknowledged that US companies ultimately foot the bill). But it firmly states that the president's economic policies will lead to a golden age for American workers.
“Simply put, President Trump's 'One Big Beautiful Bill' will unleash our economy and cause a BOOM for blue collar workers,” the White House wrote in a press release in June.
Just last week, Trump was asked to assess the US economy.
“Plus,” he said.
“Plus?” – asked Dasha Burns, host of The Conversation podcast.
“Plus, plus, plus, plus,” Trump said.
The administration dismissed concerns about persistently high inflation and affordability as a “hoax” and a “scam.”
Public sector losses, private sector gains
AND in a press release after the publication of the number of jobs, The White House focused on the fact that all the jobs lost were in the public sector, while the average number of private sector jobs increased.
The White House is not wrong. Losses were indeed concentrated in the public sector as Department of Government Efficiency (DOGE) layoffs were largely paid through the end of October.
But the broader picture, in which job growth continues to slow, has gone largely unaddressed.
“The Strong Jobs Report shows how President Trump is undoing the damage done by Joe Biden and building a strong America First economy in record time,” the White House wrote.
The problem is that almost everyone agrees that jobs data published this week is incomplete at best.
During the 43-day government shutdown, statistical agencies did not collect the data they usually collect.
Typically, government employees go to certain stores and compare unit prices of a huge basket of goods to measure inflation. Others called American families and asked if they were working or looking for work.
None of this was done during the shutdown. As a result, data for October, November and even parts of December were in a fog.
“It may still be many months before a signal can be extracted from the noise caused by public sector layoffs, an unprecedented rise in political uncertainty and a government shutdown,” wrote Carl Sciamotta, chief market strategist at financial services company Corpay.
What is certain is that The labor market has slowed this summerat the same time, inflation began to rise again.
What we don't know is whether these trends continued, accelerated, or rebounded in September, October, and November.
Weakening labor market
What worries both economists and policymakers is that if the situation does get worse, the data available now may not fully reflect those changes.
“Historically, the American labor market has not softened quietly. It weakened aggressively and suddenly,” said RBC chief economist Frances Donald.
But, Donald says, we can only work with the information that is available.
And this week's numbers show the weak labor market has eased a little.
Wolfers has been saying for months that this will happen. And he says it's not just Trump's tariff policies.
“What's happening in the United States is beyond bewilderment. It's an incoherent, chaotic political process that promotes widely discredited policies and undermines consumer and business confidence and the trust of people around the world,” he told CBC News.
He points to immigration policy, the fact that Trump faces a $1.8 trillion deficit in 2025 and has a long, established history of changing his mind without notice.
Wolfers says none of them inspire confidence among consumers deciding where to spend money, businesses deciding how to invest and foreign firms looking for new markets.
“That this would have some impact on the American economy and be negative is not at all surprising,” Wolfers said.
